Business tax / Free financial tools

Sole Proprietor vs S Corporation Calculator

Compare two simplified business tax structures using the same underlying profit.

US federal • 2026 · Instant results · No sign-up

Enable JavaScript to use this interactive calculator. The calculation method and assumptions are explained below.

How this calculator works

The sole-proprietor model applies self-employment tax and ordinary income tax. The S corporation illustration subtracts salary, employer payroll tax and extra administration, then taxes salary and pass-through profit personally. All remaining profit is assumed distributed.

Planning estimate only. Review the assumptions alongside the result before using it for a tax, financing or business decision.

IRS 2026 tax tables · IRS self-employment tax

Common questions

Does an LLC automatically save these taxes?

No. An LLC's legal form does not automatically create S corporation tax treatment. Election eligibility and timing matter.

How should I choose the salary?

Use supportable reasonable compensation based on actual work and circumstances. This tool does not establish a lawful salary or recommend an election.

Put your numbers into context.

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